Music Business

Streaming Gives Albums Wings: Why Album Sales Aren’t What They Used To Be

11Although Drake's latest album remained atop the Billboard album charts for a solid nine weeks, this prominence was not the result of sales but rather streaming, demonstrating the power of streaming in the modern music economy.


Guest post by Glenn Peoples, Music Insights and Analytics at Pandora

Key takeaways:

· Streaming played a key role in keeping Drake’s album Views atop the Billboard album chart for 9 straight weeks. In fact, streams accounted for more than half of its consumer activity from week 3 onward.

· In the weeks after an album release, streaming can provide consistent consumption, a steady connection with listeners and a regular flow of royalties. At Pandora, spins from Views were especially steady.

Album sales aren’t what they used to be. Their sales numbers have fallen as the playlist and the stream has become a more valuable currency. Nor do album sales have the same impact on the charts. Since streams count toward Billboard’s album chart, streaming often helps determine where an artist lands.

Drake’s album Views and its 9-week run atop the album chart reveal music’s new paradigm: streaming doesn’t just complement purchases, it can far exceed purchases. While album and track purchases initially put Views atop the chart, streams were a major factor is giving the album the third-longest run at #1 for a hip hop album behind MC Hammer’s Please Hammer Don’t Hurt ’Em (21 weeks) and Vanilla Ice’s To The Extreme (16 weeks).

The 2-month span at #1 got off with bang. Views debuted with album purchases of 852,000 units and another 188,000 equivalent album units for a total of 1.04 million (album equivalent) units. (Billboard uses EAUs to convert tracks and streams into albums at the rates of 10 for digital tracks and 1,500 for streams.) Album purchases fell 79.5 percent and total purchases (albums plus tracks converted into album units) fell 75 percent. Predictable but, still, ouch. (Continued below.)

Drake’s Views debuted at #1 on the album chart because of explosive first-week album sales but remained there because of strong streaming numbers. The charts show how streaming (blue line on top chart) and Pandora spins (green line on bottom chart) became the dominant economic drivers after purchases fell (black line).

Streaming was initially overshadowed by Views purchases. But that didn’t last long. At the services tracked by Nielsen Music — Apple Music, Spotify and YouTube, among others, but not Pandora — streams from Views accounted for just 15.7 percent of EAUs in week 1. After purchases dropped 79.5 percent in week 2, streaming represented 37.3 percent of EAUs.

But streaming took over in 3. That week, for the first time streaming equivalent units (streams/1,500) of 124,000 exceeded purchases (albums + tracks/10) of 115,000 units. Streaming went on to drive the majority of consumption for the rest of Views’ 9-week run and outweighed purchases anywhere from 30 percent (weeks 4 and 8) to 129 percent (week 7). When Views returned to the #1 spot two weeks later, streaming accounted for 63 percent of the album’s 92,000 EAUs.

The chart impact is undeniable. Views probably would have dropped from #1 if not for its performance at streaming services. The #2 album twice had more album purchases than Views, in weeks #5 (country star Dierks Bentley’sBlack) and #8 (rock legends Red Hot Chili Peppers’ The Getaway), but ended up with fewer EAUs (The Getaway was just 6,000 units behind). In weeks #6 and #7, the runner-up albums (former #1 album Beyonce’s Lemonade and Nick Jonas’s Last Year Was Complicated) nearly matched Views’ purchases but ended up with about half the EAUs (135,000 to 69,000 for Lemonade and 121,000 and 66,000 for Last Year Was Complicated).

During its 9-week run, Views received a steady number of spins from Pandora listeners. Views peaked at 35.5 million in week 3, fell gently in week 4, and settled into a consistent groove between 27 million and 29 million from weeks 5 to 9. Although they’re not counted for Nielsen’s chart purposes, Pandora spins would have given Views an even more comfortable atop the chart. In the 3rd week, when streaming overtook purchases, Pandora spins would have amounted to 9.6 percent of EAUs (at the standard 1,500-to-1 conversion rate). By week 9, Pandora spins accounted for 16.6 percent of EAUs — that’s 1 in 6 units.

In the first half of 2016, album sales fell 13.6 percent and track sales dropped 23.9 percent from 2015, according to Nielsen Music (its competitor BuzzAngle had almost the same numbers). Only because of the 58.7-percent gain in streams did music consumption post a gain. Even a hit album likeViews needs a shoulder to lean on.

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